Where your 12% and your employer’s 12% go
Rohan is 25 and his basic pay + DA is ₹30,000 a month. He puts in 12%, which is ₹3,600. His employer matches it, but 8.33% of pay up to the ₹25,000 wage ceiling goes to the pension scheme (EPS). That’s ₹2,083 a month, the most it can be from 17 September 2026. Only the remaining ₹1,517 goes to EPF.
So ₹5,117 a month goes into EPF. If his pay rises 5% a year and EPF keeps paying 8.25%, he’ll have about ₹2.01 crore at 58. He puts in ₹34.59 lakh, his employer ₹26.34 lakh, and interest adds about ₹1.40 crore. Another ₹8.25 lakh goes to EPS over the years.
How the interest is added
EPFO works out interest on the balance at the end of every month and credits it once a year. The calculator does the same:
Interest for the year = Σ month-end balance × rate ÷ 1200
In Rohan’s first year that’s ₹2,744. The rate is 8.25% for FY 2025-26, and EPFO declares a new one every year.
Capped PF or full basic
Many employers work out PF only on pay up to ₹25,000. Then Rohan pays ₹3,000 instead of ₹3,600, and the employer’s EPF share falls to about ₹917, because EPS still takes its ₹2,083. If his PF stays capped for his whole career, he retires with about ₹75.48 lakh instead of ₹2.01 crore. The in-hand salary calculator shows the flip side: more money in hand each month.
VPF and the EPS pension
You can put in more than 12%. The extra is Voluntary PF (VPF) and earns the same rate, though the employer still puts in only 12%. At 20%, Rohan’s balance at 58 grows to about ₹2.81 crore. Note that interest on your own contributions above ₹2.5 lakh a year is taxable.
The EPS money is not in the EPF balance. It pays a monthly pension from 58 once you have 10 years of service. If you joined with pay above the wage ceiling, you may not be in EPS at all, and the employer’s full 12% goes to EPF.
| Your share | 12% of basic pay + DA, more with VPF |
|---|---|
| Employer’s share | 12%, minus the EPS part |
| EPS limit | ₹2,083 a month (wage ceiling ₹25,000 from 17 September 2026) |
| Interest rate | 8.25% for FY 2025-26, declared every year |
Frequently asked questions
What is the EPF interest rate now?
8.25% a year for FY 2025-26, ratified in June 2026. EPFO declares a new rate every year. Interest is worked out on each month-end balance and credited once a year. The calculator assumes the same rate for every future year.
How much of the employer’s 12% goes to EPS?
8.33% of your pay up to the wage ceiling goes to the Employees’ Pension Scheme (EPS). The ceiling is ₹25,000 a month from 17 September 2026, so EPS gets at most ₹2,083 a month. The rest of the employer’s 12% goes to your EPF account.
Why is my PF deduction only ₹3,000 a month?
Many employers work out PF on pay up to the wage ceiling, ₹25,000 a month from 17 September 2026, and not on your full basic. 12% of ₹25,000 is ₹3,000. Your salary slip shows which method your employer follows.
What is VPF and does it earn the same interest?
Voluntary PF is anything you put in above the compulsory 12%. It earns the same EPF rate, but the employer still puts in only 12%. Interest on your own contributions above ₹2.5 lakh a year is taxable, so very large VPF amounts lose part of the tax benefit.
Is the EPS pension part of my EPF balance?
No. The money that goes to EPS is not in your EPF balance. It pays a monthly pension from 58 once you have 10 years of service. The calculator shows how much went to EPS separately and leaves it out of the balance.
Calculator maintained by Manoj. Last reviewed: 19-10-2026. Rates and rules are checked against official sources. Tell us if something has changed. Contact